2020 (2) TMI 1736 - HC - Indian Laws

Builder fails to deliver flat despite full payment since 2012, single member authority orders upheld under Section 81

M/s. K.D.P. Build Well Pvt Ltd. Versus State of U.P. And 4 Others

The HC dismissed the petition challenging orders by U.P. Real Estate Regulatory Authority passed by a single member. The court held that under Section 81 ... Whether the orders dated 13.06.2018 and 29.06.2018 passed by the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar, were without jurisdiction due to being passed by a single member instead of a full bench as per Section 21 of the Real Estate (Regulation and Development) Act, 2016? - HELD THAT:- In view of the provision contained under Section 81 of the Real Estate (Regulation and Development) Act, 2016 and as per decision taken by the U.P. Real Estate Regulatory Authority in Agenda No. 1 of meeting dated 05.12.2018 the impugned orders dated 13.6.2018 and 29.06.2018 passed by the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar has been rightly passed by the single member and the arguments raised by learned counsel for the petitioner that the impugned order was passed without jurisdiction has no force and is declined. Considering the arguments raised by the learned counsel for the respondent no.2 that the complaint was filed by respondent no.5 before the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar in the year 2012. Since then several notices were issued and adequate opportunity was afforded to the petitioner by the authorities concerned but th petitioner was avoiding the appearance and hearing of the case being no alternative the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar passed the impugned orders. There are no hesitation to observe that the undisputed fact is that the respondent no.5 has paid the entire amount towards the cost of Flat yet possession of the Flat was not given to the respondent no.5 since 2012 till filing of this writ petition. It is further not denied by the petitioner that the order of the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar was passed in the year 2018 and since then any amount in compliance of the order impugned was paid to the respondent no.5. This conduct of the petitioner shows that he is not liable to get any sympathy by this Court while exercising extra ordinary jurisdiction under Article 226 of the Constitution of India. It is further obseraved that the law of equity and principle of natural justice go in favour of respondent No. 5. Conclusion - The delegation of powers to a single member is valid under Section 81 of the Real Estate (Regulation and Development) Act, 2016. The interest rate applied is justified under the U.P. Real Estate Regulation (Agreement for Sale/Lease) Rules, 2018. Petition dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:Whether the orders dated 13.06.2018 and 29.06.2018 passed by the U.P. Real Estate Regulatory Authority, Gautam Budh Nagar, were without jurisdiction due to being passed by a single member instead of a full bench as per Section 21 of the Real Estate (Regulation and Development) Act, 2016.Whether the recovery certificate and citation issued for the amount of Rs. 6,55,764.26 were illegal and arbitrary.Whether the interest rate applied (MCLR + 1%) was excessive and unjustified.Whether the orders were passed ex parte, denying the petitioner a fair opportunity to present their case.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Jurisdiction of Orders Passed by a Single MemberRelevant Legal Framework and Precedents: The petitioner argued that the orders should be quashed as they were passed by a single member, contrary to Section 21 of the Real Estate (Regulation and Development) Act, 2016, which prescribes a composition of a Chairperson and at least two members.Court's Interpretation and Reasoning: The court referred to Section 81 of the same Act, which allows for delegation of powers to any member or officer. The U.P. Real Estate Regulatory Authority had, in its 5th meeting, delegated such powers to a single member, which the court found valid.Application of Law to Facts: The court concluded that the delegation of powers was legitimate and the orders were not without jurisdiction.Conclusions: The argument that the orders were passed without jurisdiction was rejected.Issue 2: Legality of Recovery Certificate and CitationRelevant Legal Framework and Precedents: The petitioner claimed the recovery certificate and citation were illegal as they were based on orders passed without jurisdiction.Court's Interpretation and Reasoning: Since the orders were deemed valid, the subsequent recovery actions were also considered lawful.Conclusions: The recovery certificate and citation were upheld as valid and enforceable.Issue 3: Interest Rate AppliedRelevant Legal Framework and Precedents: The interest rate was challenged as excessive. The court referenced Clause 9.2(ii) of the U.P. Real Estate Regulation (Agreement for Sale/Lease) Rules, 2018, which justified the interest rate applied.Court's Interpretation and Reasoning: The court found the interest rate to be appropriate, considering the delay and the financial burden on the respondent.Conclusions: The interest rate was deemed fair and in accordance with the law.Issue 4: Ex Parte Nature of OrdersRelevant Legal Framework and Precedents: The petitioner argued that the orders were passed ex parte, violating principles of natural justice.Court's Interpretation and Reasoning: The court noted that several notices were issued, and the petitioner failed to appear, justifying the ex parte decision.Conclusions: The ex parte nature of the orders was justified, and the petitioner's argument was dismissed.3. SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning: 'The Authority may, by general or special order in writing, delegate to any member, officer of the Authority or any other person subject to such conditions, if any, as may be specified in the order, such of its powers and functions under this Act (except the power to make regulations under section 85), as it may deem necessary.'Core Principles Established: The delegation of powers to a single member is valid under Section 81 of the Real Estate (Regulation and Development) Act, 2016. The interest rate applied is justified under the U.P. Real Estate Regulation (Agreement for Sale/Lease) Rules, 2018.Final Determinations on Each Issue: The court dismissed the petition, upholding the validity of the orders, recovery certificate, and interest rate. The ex parte nature of the orders was justified due to the petitioner's non-appearance.The writ petition was dismissed, and no order as to cost was made.